Asset market equilibria in cryptocurrency markets: Evidence from a study of privacy and non-privacy coins

【Author】 Sapkota, Niranjan; Grobys, Klaus

【Source】JOURNAL OF INTERNATIONAL FINANCIAL MARKETS INSTITUTIONS & MONEY

【影响因子】4.217

【Abstract】This paper explores whether asset market equilibria in cryptocurrency markets do exist. In doing so, it distinguishes between privacy and non-privacy coins. Most recently, privacy coins have attracted increasing attention in the public debate as non-privacy cryptocurrencies, such as Bitcoin, do not satisfy some users' demands for anonymity. Analyzing ten cryptocurrencies with the highest market capitalization in each submarket in the 2016-2018 periods, we find that privacy coins exhibit a distinct market equilibrium. Contributing to the current debate on the market efficiency of cryptocurrency markets, our findings provide evidence of market inefficiency. Moreover, the asset market equilibrium of privacy coins appears to originate from non-privacy coins with highest market capitalizations. We argue that the reason for this finding could be that non-privacy coins may be the first choice for criminals who might prefer cryptocurrencies exhibiting both a high level of anonymity and liquidity.

【Keywords】Cryptocurrency; Bitcoin; Privacy coins; Non-privacy coins; Market equilibria

【发表时间】2021 SEP

【收录时间】2022-01-02

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